Mindful Money’s Monday share tips: Whitbread, Ashtead & Debenhams

16th June 2014

Despite Whitbread’s stock rocketing over the past year analysts are gearing up for more gains with the market consensus calling the firm a ‘strong buy’ ahead of its update on Tuesday.

The Costa Coffee and Premier Inn owner, which publishes its first quarter numbers tomorrow, has witnessed its shares firm by 45% over the past 12 months and brokers including JP Morgan Casenove and Credit Suisse have just re-iterated upbeat notes on the FTSE 100 constituent.

However Sheridan Admans, investment research manager at The Share Centre, who for his part has labelled the shares a ‘hold’ sounds a word of caution noting that any mild let up could result in some profit taking as investors consolidate their position.

But the firm is expected to report broadly positive trading where like for like sales gains are forecast across its three divisions, helped by the UK’s continued economic recovery.

Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers says: “Industry trends support sales growth expectations at both Premier Inns and its pub/restaurants business, although tough comparatives may drag on growth at Costa Coffee.”

Ashtead Group is another top-flight constituent to have enjoyed a strong share price rally of late. Up 48% over the past year, the global equipment rental firm publishes its fourth quarter results on Wednesday.

Like Whitbread, the market consensus is also pointing to a ‘strong hold’ with analysts at JP Morgan Casenove and Jeffries backing the shares.

But while recent updates have been strong there will be some concerns about the impact of the strength of the pound and growing competition. Admans, who calls Ashtead a ‘hold’, says: “Investors should note that there may also be news from the group on its views of future acquisitions.”

FTSE 250 listed retailer Debenhams is scheduled to report its third quarter trading update on Friday. Following a post Christmas profit warning, on the back of its lacklustre online offering and tougher competition, its shares have been less in favour and are off by 8% over the past three months.

Bowman notes that in the wake of a significant share purchase and subsequent sale by retailer Sports Direct, the possible announcement of a trading partnership could be forthcoming.

He says: “Agreement for Sports Direct to open outlets within a number of Debenhams stores could be seen. An update on management’s intention to offer a cafe or restaurant across its stores may also feature.”

Ahead of the announcement and with required investment expenditure dragging on earnings, analyst opinion currently points towards a ‘hold’.

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